One of the biodiesel production problems is the high price of plant oil as a raw material, causing the high cost of biodiesel in the market and less competitive compared to the diesel fossil fuel. Most biodiesel production plants which, are located far from the raw material source, especially from palm oil mill, and are not integrated with palm oil mill can cause the cost of raw material even higher, and hence increased biodiesel production cost. This problem needs to be anticipated and solved by integrating the biodiesel plant with the palm oil mill, so that some of the crude palm oil produced or off-grade palm oil recovered from POME can be processed and converted to biodiesel product. Biodiesel can further be used as diesel-substitute fuel for the operation of palm plantation and palm oil mill. With this integration concept, the investment and production costs can be less because of the availability of crude oil raw material and utilities (water, steam and electricity) in the palm oil mill. To implement the idea of integration strategy to become reality, the development of engineering design of biodiesel plant integrated with palm oil mill is needed with the consideration of some technical aspects of : (i) the internal need of diesel fuel, (ii) supply of raw material, (iii) the selected production process, (iv) the availability of utilities and, (v) calculation of estimated investment and production costs. The concept of integration is the combined and merged business of biodiesel production and palm plantation and oil mill. This concept will give the optimum profit and benefit for utilization of crude palm oil or off-grade palm oil for producing biodiesel to substitute the consumption of diesel fuel in the palm industries.
Keywords: Biodiesel, Biodiesel Plant, Diesel Fuel Substitution, Integrated Biodiesel Plant, Palm Oil Mill